For 25 years, Steven Halpern, editor of TheStockAdvisors.com, has surveyed the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is one of 100+ ideas in the Best Stocks for 2008 report.

"My favorite conservative stock for 2008 is Mastercard (NYSE: MA)," says Ken Kam, who first added the stock to the 'Best Ideas' portfolio of his Marketscope newsletter in June.

"With the financial sector getting killed as the credit crisis expands, investors are scrambling for quality and safety in financials -- the largest sector of the S&P 500. Mastercard fits the bill because of the reasons we liked it in the first place -- no credit.

"Until recently, most investors thought of Mastercard as a credit card company. Its comparables were American Express, Capital One, and Discover -- all credit card companies that HOLD credit card risk on their balance sheets. Mastercard does not.

"Mastercard processes the transactions and charges an interchange fee. The credit crunch spiraling its way through the market is affecting consumers. Access to credit has dried up so it is difficult, if not impossible, to get new mortgages or home equity loans.

Do your homework and buy when other investors are afraid: sound advice from Ken Kam, portfolio manager of the Masters 100 fund. In this edition of StockWatch: Between the Bells, the Marketocracy co-founder offers insight into his investment strategy.

Agreeing with recent StockWatch contributors, Ken says now is the time to be bullish. The ongoing mortgage meltdown may have spooked the credit markets, but companies themselves are doing well. Ken sees choice buying opportunities available for investors who have done their research.

Alas, Ken says it's still too early to return to the housing sector, despite discounted shares throughout the sector. The Federal Reserve's rate cut last month may have eased the worries of securitized mortgage owners, but the immediate future looks gray for homebuilders.

Instead, Ken recommends hunting for opportunity in the energy sector. Pausing recently after three years of growth, the energy sector now looks primed to gush again, if oil's unprecedented highs are any indicator.

Just looking for a hot tip? Ken's got one for you: Elan (NYSE: ELN). With buyout buzz surrounding its partner Biogen Idec (NASDAQ: BIIB), Elan could soon make a play for full rights to their joint multiple sclerosis drug, Tysabri.

Want more tips? Check out these recent StockWatch interviews:

• Midas Funds portfolio manager Thomas Winmill
• Timothy Sykes, author of An American Hedge Fund: How I Made $2 Million as a Stock Operator & Created a Hedge Fund
• AOL Money Coach Hilary Kramer
  

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Ken Kam, editor of Marketscope, chose two stocks in the Top Picks for 2007 report and both picks qualified him for our Top 20 Advisors. His selection of Valero Energy Corp. (NYSE: VLO) rose 48%. Here is his original recommendation for Valero and his current opinion on the stock.

In addition, Ken also picked Elan Corp. (NYSE: ELN) in our Top Picks 2007 report and its gain of 35% also qualifies among our Top 20 Advisors. Now, he is now re-recommending the shares as his current favorite for the balance of 2007.

The advisor explains, "Elan has been strong on rumors that Biogen (NASDAQ: BIIB) -- Elan's 50% partner for its multiple sclerosis drug Tysabri -- is interested in acquiring the company. Elan has also show recent strength on news that the company's Alzheimer's drug (AAB-001), which is partnered with Wyeth (NYSE: WYE), is being advanced to Phase 3 trials.

"When a stock makes a big move in a short period, there is a tremendous temptation to sell and 'lock in profits.' However, when the price move is accompanied with good news, the initial bump may be the start of a major move up. If you are too quick on the trigger, you may miss the bigger, longer term.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Valero Energy (NYSE: VLO) is the favorite conservative investment for 2007 from Ken Kam, editor of Marketocracy's Marketscope. He notes, "In spite of nearly doubling its earnings in the past year, Valero currently trades at a P/E of 6.

"I find comfort in the combination of solid earnings, earnings growth, and low P/E ratio. With the economy slowing, many companies are going to find it harder to keep their earnings growing next year.

"I think many people misunderstand Valero's economics because the stock seems to sell off whenever the price of oil drops. But when oil prices go down, Valero's biggest cost of production goes down and demand for refined products increases. How is this bad for Valero?

"Wall Street accords the stock a P/E of 6 because analysts think refining industry profits are going to fall. To back up their view, they point to the fact that there has been a bust after every previous oil boom.

"They may be right, but I think Valero's profit margins will remain high as long as there are no new oil refineries built in this country. The minute we hear that the government has issued all the permits needed to build a new refinery, we'll have roughly two years before it comes online and begins to affect refining industry profit margins.

"We'll be monitoring the situation, but the last time a new refinery was brought online in the U.S. was in 1976, so don't hold your breath waiting for news on this front."

To see Ken's favorite speculation for 2007, click here.

Each year Steven Halpern, editor of TheStockAdvisors.com, surveys the leading financial newsletter advisors asking for their favorite stocks for the coming year. This article is part of his 24th annual Top Picks Report.

Elan Pharmaceuticals (NYSE: ELN) is the top speculative stock for 2007 from Ken Kam. The editor of Marketocracy's Marketscope, explains, "Last year, I also chose Elan as my top pick because I thought their multiple sclerosis drug, Tysabri, would be approved for sale again.

"It was, but it didn't happen until July. Further, the FDA then required additional testing. This slowed down the sales that I had expected and led to disappointing sales in the third quarter. However, I think this delay was a speed bump, not a brick wall. Thus, the growth I thought would occur in 2006 I now think we'll see in 2007.

"Over the next 12 months, I think Elan's price will move up as Tysabri sales accelerate in the U.S. and Europe. In addition, Elan just filed today for approval to use Tysabri to treat patients with Crohn's disease -- a patient population that may ultimately double Tysabri's sales potential.

Ken Kam is a longtime mutual fund manager who came up with an innovative way to manage money about five years ago. He created the site Marketocracy.com, an online community where investors are invited to join and create portfolios, which are tracked publicly. He then takes the picks of the top 100 performers and sticks them in the mutual fund he manages (this is simplifying a bit, but you get the idea).

The Marketocracy Masters 100 Fund (MOFQX) has outperformed the S&P 500 the past two years, but did pretty poorly in 2004. Morningstar gives it just one star, but Kam is looking forward to its five-year anniversary when he says its returns will be more than double the S&P 500 over that time.

What I find fascinating about Kam's business model is that the community at Marketocracy has become Kam's own research pool. When he has an idea, he tests it against members. When he's looking for new ideas, he checks to see what the top-performing managers on the site are buying. (Premium members get to do the same thing).

This year Kam started his Best Ideas Blog. There he posts about companies he considers, well, his best ideas. His site charges subscription fees for full access to newsletters, forums and the blog. But he shared some of his ideas during a recent visit to AOL's offices.